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BI on guard against impact of Chinese crash
Bank Indonesia (BI) says it remains vigilant amid the slide in the Chinese stock market as China is the worldâs economic growth-promoting country and one of Indonesiaâs main trading partners
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ank Indonesia (BI) says it remains vigilant amid the slide in the Chinese stock market as China is the world's economic growth-promoting country and one of Indonesia's main trading partners.
'We must anticipate this because China has become the center of regional and global economic growth. If the market's correction is sharp, there will be impacts we must anticipate because there are interconnected risks between the two countries,' BI governor Agus Martowardojo said as quoted by Antara on Thursday. He was speaking in an event in Jakarta on Wednesday evening.
Agus said the capital market in China had grown at an astonishing rate and although it had plunged by up to 30 percent since June 12, compared to its growth during the past year, the market was still up year-on-year.
'If there has been a correction in the Chinese stock market, and it continues to experience corrections even after the issuance of a policy to hold back stock prices for a year, we must remain vigilant against its possible impact,' said Agus.
Agus said he was still optimistic that Indonesia's economic growth would be better in the second half of this year; however, the economic conditions in China needed to be watched closely and Indonesia must be wary.
'Our study shows that if China's economic growth declines by up to 1 percent, Indonesia's economic growth could decline by in between 0.4 ' 0.6 percent,' said Agus. (ebf) (++++)
